HL Deb 31 January 1985 vol 459 cc800-21

House again in Committee on Clause 20.

Clause 20 agreed to.

Clause 21 [The Discipline and Appeals Committee]:

Lord Graham of Edmonton moved Amendment No. 25: Page 19, line 11, after ("committee") insert ("whose membership shall reflect the composition of the Council").

The noble Lord said: As the Committee will have realised, Amendment No. 23 lies on a par with Amendment No. 25; and Amendment No. 25 deals with Clause 21, which relates to the Discipline and Appeals Committee. The Clause begins: The Council shall establish a committee". What I am seeking to do in this amendment is to persuade your Lordships' Committee that, while simply saying that a committee shall be established is acceptable as far as it goes, we might go a little further.

The Investigating Committee and the Discipline and Appeals Committee have important functions to deal with alleged malpractice on the part of licensed conveyancers. The noble and learned Lord the Lord Chancellor, quite fairly, has referred more than once this evening to his strong support for consumer protection and the desire to ensure that the consumer of the conveyancer services shall receive protection. But in regard to Schedule 2, which gives effect to these matters, what we are concerned about is the composition of the council itself. Little is said about the composition of these two committees. The only provisions—one is in Clause 24 and the other is the one I refer to now: Clause 21 (3)(b)—are that the rules may stipulate that people who are not members of the council may be appointed to the committees. Given the importance which is attached to the balancing composition of the council itself—that is referred to in another part of the Bill—it seems appropriate that membership of the two committees should reflect this composition.

It may be that the noble and learned Lord will say once more that these are matters which can best be left either to the council, when it is established, or perhaps to himself. It is not a matter of great moment, but we think it is logical that, if Parliament goes out of its way to seek to lay down a manner in which various interested elements such as consumers and representatives of non-solicitor conveyancers shall, in proportion, be members of the council, these two committees, in whatever numbers are determined, should reflect the composition of the council, because, as I believe the Committee will be aware, there is likely to be some dispute on a range of very important matters, particularly in the early days. It is in that spirit that I beg to move the amendment.

The Lord Chancellor

The mandatory provisions in the Bill provide that consumer representatives shall be appointed to the council and they will, of course, be eligible to serve on the committees. The Bill does not fetter the council's discretion in the matter of the detailed composition, but I would certainly expect it to ensure that lay persons are properly represented on the committees.

The noble Lord will bear in mind that, in addition to what I have just said, Clause 20(4) and Clause 21(3) enable the council to appoint to the committees persons who are neither licensed conveyancers nor members of the council. Therefore, while I have a good deal of sympathy with what the noble Lord has said, I do not think that the amendments in themselves are necessary to give effect to the principle of a broadly-based membership on the Investigating Committee and the Discipline and Appeals Committee, since the provisions of Clause 20(4) and Clause 21(3), to which I have already drawn attention, and the fact that the council itself will contain consumer representatives under the general provisions, probably cover the case.

Lord Graham of Edmonton

I do not intend to press the matter, but I am intrigued by the fact that in Schedule 2 the Government in presenting the Bill have gone out of their way to lay down that: The Council shall consist of—

  1. (a) not more than eleven persons who are licensed conveyancers; and
  2. (b) not more than ten persons who are not licensed conveyancers".
I take the point that the noble and learned Lord makes—that good sense can be expected to prevail. One wishes to see a balance. Clearly those who drafted the legislation felt that on balance there ought to be slightly more representing licensed conveyancers than those representing persons who were not licensed conveyancers. I was seeking some words or some assurance from the noble and learned Lord that that was a broad indication of what we might expect to see when these two committees are established.

The Lord Chancellor

If you have a council of relatively small composition and committees of perhaps smaller composition, then anybody who has been on the Selection Committees of either House knows how difficult the problem is. But I point out to the noble Lord that there is a safeguard. The composition of the committees has to be laid down in rules. The rules will require the Lord Chancellor's concurrence and there you have parliamentary accountability.

Lord Graham of Edmonton

In view of the final statement by the noble and learned Lord, I am satisfied and I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Mishcon moved Amendment No. 26:

Page 19, line 17, at end insert— ("; and (c) allegations or complaints made by any person about a licensed conveyancer where the Investigating Committee have refused or neglected to refer such allegations or complaints to the Discipline and Appeals Committee under section 20.").

The noble Lord said: I am glad to say that this again is a short point. There is a difference—and I am not quite sure that it is a proper and just difference—between the proceedings in regard to complaints by members of the public against solicitors and complaints that there might be against licensed conveyancers. I believe that the licensed conveyancers themselves would agree with me that this amendment is necessary.

8.15 p.m.

I shall point to the difference. So far as the solicitors' Disciplinary Tribunal is concerned, they can receive applications direct from members of the public. I quote as examples of that Section 31(2) and Section 37(4) of the Solicitors Act 1974. But it appears that under this procedure, apart from applications by a disqualified person under Clause 23 or appeals under Clause 25, cases can only be referred by the Investigating Committee so far as licensed conveyancers are concerned. That means that if the Investigating Committee decide not to refer the case, then there is no appeal open to the member of the public and no way of having the matter properly looked at. Therefore, the amendment is put forward to add paragraph (c), which says: allegations or complaints made by any person about a licensed conveyancer where the Investigating Committee have refused or neglected to refer such allegations or complaints to the Discipline and Appeals Committee under Section 20". I beg to move.

Lord Campbell of Alloway

Very briefly, I support the amendment. It appears to fill a gap, and a gap which ought to be filled.

The Lord Chancellor

That was one of the briefest and most attractive speeches that I have heard in this House for some time. It caught me almost unguarded.

Let us look at the relationship between the disciplinary machinery set up by the new system and the Law Society's existing machinery. Under the new machinery the Investigating Committee's task will be to conduct preliminary investigations and it will conduct perliminary investigations about licensed conveyancers to ensure that there is some substance of fact and that the matter complained of would, if found to be true, constitute a disciplinary offence.

Under the new arrangements the Investigating Committee is not intended to conduct its own hearing or assess the merits of the case. That is not part of its functions. If it is satisfied that an allegation is not manifestly unfounded or unrelated to a disciplinary offence, then it will refer the matter to the Discipline and Appeals Committee. But if it were to be provided (as I think this amendment would do) that the committee were required to hear the cases rejected by the Investigating Committee, then the Investigating Committee would be a fifth wheel to the coach—it would be totally unnecessary and superfluous.

I quite agree that in the case of the Law Society direct access to the Disciplinary Tribunal is preserved for persons whose complaints are rejected by the Professional Purposes Committee. But there are two important differences which make the analogy dangerous and false. One must not forget that the Professional Purposes Committee of the Law Society, unlike the Investigating Committee of the new profession, acts as an adjudicating body. It works rather in this way. There is a staff which carries out the preliminary investigation. Then it meets however often—and I think that it is rather often—to discuss matters of general professional importance and then goes on to discuss these cases. However, the committee acts as an adjudicating body rather than simply as a body for preliminary investigation, which in its case is carried out by the department, and not by the committee.

The second difference is that hitherto there has been no lay membership on the Professional Purposes Committee of the Law Society. I think perhaps wrongly, but nonetheless really, this has damaged public confidence in the impartiality of the committee. But as regards the Investigating Committee of the new body, this will not be the case. The Investigating Committee of the new body will have a substantial lay element from the start. I believe that the Law Society itself now recognises that it could carry out its responsibilities better with lay representatives. In this Bill I believe that it seeks to get power to do so.

Having set out the differences and the dangers of the argument by way of analogy in this case, I would hope that the noble Lord has been reassured and, therefore, that this amendment will be considered unnecessary.

Lord Mishcon

I am most grateful to the noble and learned Lord for the care that he has taken in answering this amendment. I know he will forgive me if I say that I am not very happy with his answer, although I believe that I have fully understood it. I am perfectly prepared to waive any argument about comparability, although I should have thought there was a great degree of comparability. The fact that members of a department make an investigation means that they report, and it is for the committee of the Law Society to make up its mind.

However, the whole point is that, whatever that committee decides, the members of the public have a right to go direct to the solicitors disciplinary tribunal if they have a complaint. Let us forget the argument of analogy and take the licensed conveyancers on their own—a body for which I am perfectly sure we shall all come to have a great respect. The members of the public will find that there are lay members on the Investigating Committee. The chances are that those lay members will not constitute the majority of the Investigating Committee and there will have to be a vote as to whether or not a complaint goes further. It may very well be that, for all the members of the public know, all the lay members of this body have voted that the matter should go further and all the licensed conveyancing representatives, as it were, have voted against but they constitute the majority.

I am anxious—and this is my only anxiety—that it shall be seen transparently that justice is being done and that a member of the public who is aggrieved at the treatment that he has received from a licensed conveyancer shall, if his complaint is not passed on by the Investigating Committee, still have the right to go to the tribunal and say, "I am not satisfied with this; I still think that I have a grievance and that I have been badly treated; therefore I want to have that right". To bar him, without him having any right of appeal whatever, from going direct to the corresponding tribunal I believe would indicate to the public that, in our legislative capacity, we have not properly protected the right of complaint as regards what is an entirely new profession.

I am anxious to say that I wish this new profession well. I hope that it will function properly. But at the moment we are dealing with unknown quantities and even if we were dealing with known quantities, known personnel, known professional rules and known standards of conduct, I should still want the member of the public to have the right to say, "I want this matter looked at by the disciplinary tribunal".

At this hour and with this number of noble Lords in the Chamber, I shall obviously not try to test the opinion of the Committee on what is a very important matter. But I wonder whether I have at least convinced the noble and learned Lord to this extent: that, having regard to the strong arguments in favour of this amendment—and, of course, the noble Lord, Lord Campbell of Alloway, is the only other noble Lord who has spoken so far on this matter—the noble and learned Lord would agree to look at the matter again in the light of this discussion and indeed any comment that any noble Lord may wish to make.

Lord Denning

In a way I think that we ought to rely on the Investigating Committee. If it thinks that there is no case, that ought to be the end of the matter. It is only if there is a case that the matter should go before the Professional Purposes Committee. As my noble and learned friend the Lord Chancellor said, in a way if need be pretty well every case would go to the disciplinary committee. I think that the Investigating Committee is a good thing and we should go by its decision. If it thinks there is nothing in it, let us stop there.

Lord Monkswell

Considering the learned gentlemen speaking in this debate, I rise with some trepidation to support this amendment from the point of view of a lay Member. I want to suggest that one of the major functions of the Investigating Committee will be to advise people who have complained of the complete circumstances with regard to the regulations as their complaint is seen by those regulations. It is hoped that this will give rise to the complainant withdrawing the complaint. Should that process not be satisfactory to the complainant, it is certain that an ordinary member of the public will feel aggrieved that his case has not been heard by the full disciplinary committee. As a very junior lay Member of this Committee, I would hope that your Lordships would consider this amendment very favourably.

Lord Mishcon

I would hope that all lay and junior Members would speak in the same terms and with the same authority as the noble Lord, Lord Monkswell. Having said that, I again invite the noble and learned Lord the Lord Chancellor to say whether he is prepared to consider the matter in the light of the views that have been put forward. If he can give that indication, I shall take a certain course.

The Lord Chancellor

First, there is absolutely nothing about legal learning in this amendment. The noble Lord, Lord Monkswell, is perfectly right—this is a question of machinery. I do not want to offer very much hope here, but in view of the appeal that has just been made I shall obviously have the matter looked at again. I do not want to offer a great deal of hope because the noble Lord, Lord Mishcon, did not deal with what I though I had put at the forefront of my case; namely, that if you once allow an unlimited appeal from the Investigating Committee to the other and higher committee, you eventually have a coach with five wheels; you have destroyed the Investigating Committee altogether.

I do not agree with the noble Lord, Lord Monkswell, that it is an advisory body. It is there to sieve out manifestly frivolous and unfounded complaints, of which I am sorry to say that there are a very large number in these cases. Even in my own rather remote capacity I receive many complaints from various members of the public and even from Members of Parliament about members of the legal profession. The committee's function is to act as a sieve and to put things together into a coherent form when they are not manifestly absurd, either because the facts alleged are incredible or because the facts alleged do not amount to disciplinary offences at all, even if proved.

8.30 p.m.

I am afraid that if this amendment were allowed it would deprive this important committee, this valuable sieve, of any separate existence or function at all. The one thing we do not want to construct is a coach with five wheels. I suppose it is slightly better than a coach with square wheels, but that was the forefront of my case. I explained a lot about the business of the Professional Purposes Committee in the Law Society and so on, and I have done so at intervals not because I understand them very well myself but because I think there are probably Members of the Committee who understand them even less well than I do. I shall not absolutely shut the door on the noble Lord, Lord Mishcon, but I do not want to offer him very much hope here.

Lord Campbell of Alloway

May I ask my noble and learned friend one question? It only struck me listening to what was said. If for example the lay members on the committee were predominant, then all the arguments about not allowing the public to have access would dissolve. Therefore if you altered the proportion and got a predominance of lay members, which I think the Law Society is getting towards in another context, then there would be no question about questioning the right of the public to access.

The Lord Chancellor

I am not sure that I am following my noble friend. I am not contemplating—and I think I made that clear in answer to an earlier amendment by the noble Lord, Lord Graham—that the lay members and the professional members will vote as a party, so to speak, inside either the committees or the Council. I do not think that that is going to happen. If it did happen, I doubt whether the machine would work at all. It would then be a coach without horses.

Lord Mishcon

The noble and learned Lord courteously repeated what he thought to be the heart of his argument. If I may attack that heart with some affection I do so in the following way. If it were a fact that the Investigating Committee investigated and then reported somewhere, then I can well understand that one says that you are adding a fifth wheel to the four wheels of the carriage and you are making their work unnecessary. You are making it in fact nugatory. That is not the position. They both investigate and adjudicate, because the investigation leads to a decision by that committee as to whether or not there is a prima facie case to go forward. That is an act of adjudication. Investigation means that you look at the facts and you report to somebody else. That is investigation.

It is because of the adjudicating function which shuts out the member of the public that I asked for the other avenue, to which a member of the public has not got to go if he does not want to. He may accept the decision of the Investigating Committee, which I have no doubt will give a reason for its finding.

Having said that, the noble and learned Lord has not, to use his own words, completely shut the door in my face. What he has done is to leave the door ajar. Whether it is substantially ajar or not I do not think we need measure tonight. I merely ask him whether he would kindly see that the door is kept as wide open as possible, and it may well be that I need not try to go through that door again at Report stage. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 21 agreed to.

Clause 22 [Proceedings in disciplinary cases]:

Lord Graham of Edmonton moved Amendment No. 27: Page 19, line 32, leave out ("("the defendant")").

The noble Lord said: Amendment No. 27 and those down to Amendment No. 42, excluding Amendment No. 28, number 15 amendments, and they cover two simple points.

Amendment No. 29: Page 20, line 2, leave out ("defendant") and insert ("licensed conveyancer").

Amendment No. 30: Page 20, line 3, leave out ("defendant") and insert ("licensed conveyancer").

Amendment No. 31: Page 20, line 6, leave out ("defendant") and insert ("licensed conveyancer").

Amendment No. 32: Page 20, line 9, leave out ("defendant") and insert ("licensed conveyancer").

Amendment No. 33: Page 20, line 12, leave out ("defendant") and insert ("licensed conveyancer").

Amendment No. 34: Page 20, line 14, leave out ("defendant") and insert ("licensed conveyancer").

Amendment No. 35: Page 20, line 21, leave out ("("the defendant")").

Amendment No. 36: Page 20, line 26, leave out ("fees") and insert ("costs").

Amendment No. 37: Page 20, line 26, leave out ("defendant") and insert ("licensed conveyancer").

Amendment No. 38: Page 20, line 36, leave out ("fees") and insert ("costs").

Amendment No. 39: Page 20, line 36, leave out ("defendant") and insert ("licensed conveyancer").

Amendment No. 40: Page 20, line 39, leave out ("fees") and insert ("costs").

Amendment No. 41: Page 20, line 41, leave out ("fees") and insert ("costs").

Amendment No. 42: Page 20, line 41, at end insert— ("( ) Where the Committee have given a direction under subsection (3)(b) in order to give effect to a determination by them as to the costs of a licensed conveyancer or his firm in respect of any conveyancing services provided by him or it, then for the purposes of the recovery of those costs (by whatever means) the client shall, notwithstanding any statutory provision or agreement, be deemed to be liable to pay in respect of those costs only the amount specified in the Committee's determination. ( ) If a licensed conveyancer fails to comply with a direction given by the Committee under this section, any person may make a complaint in respect of that failure to the Council; but no other proceedings whatsoever shall be brought in respect of it.").

The first point relates to the use of the word "defendant", which I referred to in Amendment No. 27, and I shall come to the other point in a moment or two. There can be an argument about whether "defendant" is the proper word. I tend to take the view that it has slightly unpleasant connotations, particularly when used from the beginning of a process, as in fact it would be here.

Again as the Commitee will have realised I am always seeking for comparability between the non-solicitor conveyancer and those who hitherto have been fully protected by the Law Society's rules. I understand that the Law Society's rules and those of the Bar do not dub a barrister or a solicitor whose conduct is being investigated "the defendant". I may be wrong. Nor do I understand in any other professional code where investigations are to take place is the term "the defendant" used.

If I am wrong and there can be brought to my attention other professions in which a person placed in an exactly similar situation is dubbed "the defendant", I merely put that on one side and take careful note of it. However, I am genuinely asking the Lord Chancellor to consider carefully when we are setting out this initial legislation whether this is the proper word.

There can be no difficulty in referring to a possibly errant licensed conveyancer as a "licensed conveyancer" when setting out the rules governing investigation of his conduct, even though that means using two words instead of one. Amendment No. 27, upon which hangs many others, seeks what in some circles used to be called equality of esteem. I hope that the Committee will agree that that is sufficient reason for accepting deletion of the word the "defendant" and instituting in its place the words "licensed conveyancer". I beg to move.

Lord Elwyn-Jones

I should like to support my noble friend's view about this matter. There is no reason why, after the first reference to the licensed person, that thereafter there could not be a reference to the "said person", as appears in regard to other professional provisions. It is important in this matter to maintain treatment with respect for the members of a profession. We are dealing here with internal disciplines, and not with court proceedings in the ordinary court. There there would be a case for maintaining the term "defendant". It is important to regard, and treat, the members of this new profession with the same respect which is due to members of any profession.

I would support the first amendment in regard to "the defendant", and for "licensed conveyancer" and perhaps use the formula to repeat those two longish words. The "said person" is shorter. But when we come to "fees" it looks as though there is a bit of snobbery creeping in. So far as solicitors are concerned, one sees a provision in regard to them with a reference to "costs", whereas in the case of these conveyancers they are described as "fees".

In Section 44A one sees a reference to the costs of solicitors, as one sees from page 2 of the Bill. But when we come to Clause 22 "costs" has suddenly become "fees". What is the reason for the distinction? Are fees something rather less solemn, important, and righteous to which the professional man is entitled than costs? "Fees" sounds as if they are getting something out of it—you know the professional man on the grab.

The Lord Chancellor

They probably are!

Lord Elwyn-Jones

Maybe, but at least cover it up! That is the essence of all professional activities. Cover it up as best you can, so with solicitors "fees" are called "costs", but the new licensed conveyancers are not allowed the luxury of that cover. Their fees are described as "fees". There is much to say for it both ways but let it not be a one-way traffic.

There is a great deal of strength in what my noble friend has said on these amendments.

Lord Simon of Glaisdale

I wonder whether the noble Lord, Lord Graham, could help me. He mentioned Amendment No. 42. He may have meant excluding Amendment No. 42. I see he nodded. We are only concerned to include Amendment No. 41, are we not?

Lord Graham of Edmonton

It is even worse than that because in trying to be helpful I pointed out that there was a group of amendments from Amendment No. 27 down to Amendment No. 41, excluding Amendment No. 28. Those amendments dealt with two points; the first one of which was the proper peg for Amendment No. 27, which I moved in relation to deleting "the defendant". The next group, which I would have dealt with when that point was out of the way, related to costs and fees. I apologise for confusing the Committee and take this opportunity of thanking my noble and learned friend on the Front Bench for his kind words about what I have yet to say.

The Lord Chancellor

We are engaged on a rather elaborate exercise in semantics. Nor am I now altogether clear about how many of these amendments we are dealing with together. They seem to me to deal with two quite separate points and both are semantic. The first is whether one should call a person who is defending a proceeding a "defendant" or something else. The second is whether one should describe "fees" as "costs", or "costs" as "fees", or both as the same thing or as different things.

I do not mind whether a defendant in defended proceedings is called a "defendant" or not. I would bitterly resent the theory that there was anything pejorative about it. All our contested proceedings in England are adversarial and involve two sides. One side is sometimes called claimant; he is sometimes called applicant; he is sometimes called appellant. Oh dear, in civil cases he is sometimes called plaintiff—a good old Norman French word, I believe. The other side is called respondent or defendant and the Scots call him a defender. Perhaps that would be better. But I do not think there is anything in this that causes me apprehension. I would not mind substituting "licensed conveyancer" for "defendant". I do not think any question of principle is involved; it is purely a question of semantics. I will consider it again, if I may. I should like to take advice about this but I see no difference whatsoever in it.

The question of fees and costs is a trifle more difficult. I always suspect the word "snobbery" when I hear it. I am never quite sure what a snob is but one must be accurate in terminology. One has to be a little careful about this. The reason for the discrepancy in terminology is that Clause 1 is based on the precedent of the Solicitors Act 1974 which distinguishes between "fees" and "costs", but for licensed conveyancers the historical background against which these two technical terms are based does not exist, for there is no historical background.

The difference in terms has no material effect except that in the case of solicitors the term "costs" includes disbursements—I think I am using the right terminology—as well as profit costs (again I hope I am using the right terminology). But in the case of licensed conveyancers the word "fees" probably encompasses both disbursements and profit costs and thus costs would have an identical meaning.

8.45 p.m.

I am not hostile to the spirit behind these amendments. I go along fully with the noble Lord's desire to promote consistency between Part I, relating to solicitors, and Part II, relating to licensed conveyancers. I should like to think again about the words "defendants" and "fees". I do not see any difference whatsoever. However, "fees" might not cover the expenses of a conveyancer whereas in respect of solicitors "costs" does cover solicitors' expenses. It is not our intention to prevent the council from directing that a licensed conveyancer's expenses should be reduced or remitted. Accordingly, I will consider Clause 22 further to see whether any amendment is necessary.

I am not sure that my brief does not diverge from what we are now doing. I seem to remember that the noble Lord said that he was not including Amendment No. 42.

Lord Graham of Edmonton

That is correct.

The Lord Chancellor

Perhaps I had better stop here.

Lord Graham of Edmonton

I am grateful. I wish to be helpful and I have an understanding about those amendments in my name that deal with the term "defendant" and the insertion of "licensed conveyancer", and those amendments that seek to delete the word "fees" and insert the word "costs". I understand that if I withdraw these amendments the noble and learned Lord the Lord Chancellor will consider this matter further and perhaps at the next stage, either in his name or mine, there will be further progress. If that is the clear understanding, I beg leave to withdraw the amendments.

Amendment, by leave, withdrawn.

[Amendments Nos. 28 to 41 not moved.]

Lord Graham of Edmonton

My amendments are not moved on the clear understanding given by the noble and learned Lord.

Lord Graham of Edmonton moved Amendment No. 42:

[Printed earlier: col. 807.]

The noble Lord said: There are two subsections in this amendment. The amendment is put forward in an attempt to achieve equality of treatment between licensed conveyancers and solicitors. On page 3 of the Bill there is the new subsection 44A which the Committee agreed earlier today should be inserted into the Solicitors Act. Subsection (5)(b) provides that where the Council of the Law Society has decided in the exercise of its powers, which the new section gives, to place a limit on the costs to which a solicitor shall receive from his client, the client shall be liable to say only the amount decided upon by the council. Subsection (7) provides for what can be done if a solicitor fails to comply with a direction given by the Council of the Law Society in the exercise of the new powers.

Clause 22 contains in subsection (3) provisions which appear to have been designed to provide licensed conveyancers as far as possible with the same conditions which the new Section 44A of the Solicitors Act will provide for solicitors. However, there are no provisions in Clause 22 which equate with those to which I have just drawn your Lordships' attention. The two subsections submitted in my amendment are designed to remedy what seems to me to be an omission and to incorporate in the Bill provisions for licensed conveyancers and their clients such as are made for solicitors. I beg to move.

The Lord Chancellor

We are now in very highly technical waters. I am not sure that I wholly understand the matter but I shall do my best both to expound and to understand it myself. Amendment No. 42, which we are now discussing, would make provisions in respect of licensed conveyancers paralleling those in Clause 1(5) and Clause 1(7) relating to solicitors. It is obviously right, starting from principle, that licensed conveyancers whose fees have been reduced under Clause 22 should be prevented from recovering the full amount from the customer, consumer, client or what-have-you.

I am not sure that the specific provision as envisaged in the amendment is necessary. It is clearly necessary in relation to solicitors because of the various other avenues by way of statutory provision that solicitors have got which govern their entitlement to recover costs from clients. There are various things that they can do. But, where licensed conveyancers are concerned, in the absence of this historical background it may be that the provisions of the Bill are already sufficient to ensure that the determination by the Discipline and Appeals Committee are not circumvented. If the noble Lord will permit me the opportunity, I should like to make some further inquiries along these lines.

The amendment also provides for an avenue of complaint to the council for anyone where a licensed conveyancer fails to comply with an order from the committee to reduce or remit his fees. This provision would roughly parallel Clause 1(7) in relation to solicitors. However, Clause 1(7) in relation to solicitors contemplates a complaint to the Disciplinary Tribunal; and that Disciplinary Tribunal is, as we have said more than once, wholly independent of the Law Society Council. The amendment provides for complaints to be made to the council; that is to say, the new council, the Council for Licensed Conveyancers, and this does not have the same independence of the committee making the original order as has the Disciplinary Tribunal of the Law Society. Therefore, I should have to consider whether the Bill provides for a satisfactory means of ensuring compliance with the orders of the committee and, if not, how one can be devised. I would ask the noble Lord on this understanding to withdraw the amendment, the first part of my case resting on further inquiries and the second on the question of the independence of the council.

Lord Graham of Edmonton

I am grateful to the noble and learned Lord. More than once he used the expression "may be". That was a clear indication that he was not wholly satisfied that the drafting before us is absolutely right. All that I have sought to do is to raise some questions. If they are answered, either in writing or by conversations which lead to further amendments at the next stage, I shall certainly understand the spirit in which the noble and learned Lord has responded to the amendment. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 22 agreed to.

Clauses 23 to 27 agreed to.

Clause 28 [Provision of conveyancing services by recognised bodies]:

On Question, Whether Clause 28 shall stand part of the Bill?

Lord Morris

As your Lordships are aware, Clause 28 makes provision for the Council of Licensed Conveyancers to make rules prescribing the circumstances in which licensed conveyancers may, in effect, incorporate themselves. There seems to be no overriding reason why there should be provision for recognised bodies. Indeed, as Clause 28 is presently drafted, there appears to be enough latitude for estate agents, banks and building societies to become such bodies. I have a real fear that Clause 28 may be a Trojan horse. Although I am not practising at the moment, as an accountant (and a very bad accountant, I may add, in every sense of the word), I recognise that there are very real dangers in the incorporation of people providing a professional service, for the simple reason that there lies a real protection for the individual, for the client, if he has recourse to the person involved either jointly or severally in a suit in the court, in the fact that the defendant in such an action need not hide behind the skirts of limited liability.

At the very least, I believe that the clause should confine the services provided by recognised bodies exclusively to conveyancing so that there is no intermix of activities or cross-subsidy or conflict of interest, which the Bill appears to me manifestly to allow by virtue of Clauses 28(1)(a) and 28(2)(a). It should be noted that the Farrand Report did not recommend recognised bodies. The Bill goes beyond Farrand in this sphere. The Farrand Report confined itself to recommending that there be imposed on conveyancers a statutory requirement that they cannot operate as employees of a limited liability company unless specifically authorised by the council. This recommendation is far removed from the proposal as in Clause 28 that bodies corporate, not only companies, may carry on conveyancing but without necessarily confining their activities to the provision of conveyancing services. Moreover, Clause 28(3)(d) leaves at large the restrictions under rules to be imposed by the council on the recognised bodies in this most sensitive area.

This clause is so wide of the mark that I believe it should be left out. If I may, I will give a quick illustration of this. Even within solicitors practising as conveyancers, there is often in practice—and those who live in the real world will recognise this—a very serious conflict of interests. The vast majority of people, to whom the purchase or sale of a house is the biggest single commercial transaction that they ever experience, will invariably instruct their solicitor to act on their behalf in other matters. Let us say for the sake of argument—and this is not uncommon—that a client of a solicitor instructs him to act in the conveyance of his property, by which the solicitor earns a great deal of money in fees. In the normal world, of course, people are slow to pay their solicitors—even slower to pay their solicitors than their tailors. Therein lies a conflict of interest, in that it would be very much in the interests of the solicitor to carry out the conveyance as quickly as possible so that he might recover, through the sums he received, the outstanding fees.

I am not in any circumstances suggesting bad faith, but there is a possibility of conflict there because he is acting on behalf of that client in two totally different spheres. There are no specific requirements under Clause 28 for professional indemnity or compensation, as under Clause 17; so the community would be wholly at risk in the case of recognised bodies. These provisions would enable licensed conveyancers to form or be employed by companies unless strictly circumscribed and recognised by the Farrand Committee, as I suggested before, in particular on the question of limited liability.

9 p.m.

I consider that for the protection of clients the essential conditions for incorporation of professional practice are that the control and responsibility should rest with fully accountable individual members of the profession. I hesitate to do so at this late hour, but this point is of such importance that I feel I should place it on the record. A professor of law in America wrote to, I think, the Economist, a very interesting letter which described very concisely the position in the United States of America. There, he stated, the lawyers played little part in conveyancing, except as representatives of institutional lenders. Experience in this regard is therefore relevant, he suggests, to the dispute in this country. In most parts of the United States conveyancing costs are higher than in England, and in recent years they have become so outrageous as to incite prolonged hearings in Congress and investigations by the Department of Housing and Urban Development. He then describes the conflict of interest which has arisen out of this practice.

If this Bill is passed in its present form, I believe that it will empower building societies, for example, to provide conveyancing services. That could create a very serious conflict of interest and it would endanger the public interest. I may be wrong, but I suspect that one of the answers to this submission, which I believe reflects a very real fear, might be, as we have heard before this evening, "Don't worry; the Lord Chancellor will be watching this very carefully by virtue of Clause 34(1), and it could not possibly happen".

Quite the simplest way to stop any of this happening is to ensure that licensed conveyancers shall not incorporate and, if they are working in partnerships, shall not have as partners incorporated bodies. This is the way that solicitors have been practising for years and also the way in which accountants have been practising for years; and I cannot see any reason whatsoever why they should be incorporated.

Lord Mishcon

It may be convenient if, very briefly, I raise a point, leaving the noble and learned Lord—with some confidence do I say this—to deal with the points raised by the noble Lord, Lord Morris. May I ask the noble and learned Lord the Lord Chancellor whether it is the Government's intention to bring forward at a later stage of the Bill an amendment which would deal with the incorporation of solicitors—we have just heard about the incorporation of licensed conveyancers—upon the basis, let me make it absolutely clear, that that incorporated body should be controlled by individual solicitors only and that of course there should be unlimited liability?

The Lord Chancellor

Perhaps I may deal with the points in inverse order, because I think that my noble friend possibly overlooked what the Benson Commission had said in relation to practising in a corporate form. The Benson Commission—I think that this is relevant to what my noble friend said, and it is also a direct answer to the noble Lord, Lord Mishcon—recommended that solicitors should be permitted to practise through companies, but with unlimited liability. The Law Society has informed my department that it would wish to see a suitable provision brought forward in this Bill. I think it is therefore right to say that I intend to table a Government amendment in due course to give the Law Society power, equivalent to those powers being given to the Council for Licensed Conveyancers, to permit solicitors to practise in corporate form.

At the Law Society's own suggestion, it will not be a statutory restriction to incorporation with unlimited liability, but the Law Society has made it clear that it does not intend to permit limited liability at present and will not do so unless and until it is satisfied that proper consumer protection can be maintained. May I say—humbly, if need be, but at any rate may I say—that it is right to take that attitude. I am sure that the council—that is, the council for the new profession—would not make, and the Lord Chancellor would not approve, rules to permit licensed conveyancers to practise through limited companies until it was fully satisfied about consumer protection.

Now I go back to the beginning again. Clause 28, which is the clause of the Bill that we are discussing, enables the council to make rules about the circumstances in which bodies corporate may be formed to provide conveyancing services. I thought perhaps I detected under the delicate references to Trojan horses, "timeo Danaos et dona ferentes", a certain suspicion that I was a kind of Odysseus of many wiles, intending through this wicked clause to introduce the wooden horse containing all the Greeks who would let loose the banks and the building societies to supply conveyancing services. I assure my noble friend that I am no Odysseus. That certainly is not the intention of the clause. There are no "many wiles" about it, and I do not think that the clause has that effect.

We know very well, of course, and we are expecting, that there will be a good deal of argument and—I hope not, but possibly—adversarial argument about the desirability of allowing banks and building socities to provide conveyancing services. I am very much concerned, and I am glad to say that my colleagues are also concerned, to see that the danger of conflict of interest is avoided. If that cannot be done, it cannot be done. But we—by which I mean the Government—are committed to seeing that it can be done. If it cannot be done, that is for Parliament ultimately to discuss, but it will not be introduced in any "subterfugeaneous"— if that is the right word—way or roundabout method. I am not going to use this clause for that purpose. That would not be honest. The issue has got to be faced in the end, but it has got to be faced as a separate question.

Lord Mishcon

Will the noble and learned Lord permit me to intervene? Did he correctly use the words that the Government felt that it should be done; namely, that building societies and banks should be allowed to carry out conveyancing services? He may be misunderstood if the language is not clear, if I may respectfully say so.

The Lord Chancellor

I do not have the documents before me, but my understanding is that Government policy is that it should be done, if it can be done without impinging upon the dangers of conflict of interests. But, at any rate, that is a separate question. It is a dispute about tomorrow. I do not know where I would wish to stand about that. What I am trying to assure my noble friend and the noble Lord, Lord Mishcon, about is that I am not going to use this as a device for missing out on this totally separate question. The point is that both solicitors, and probably licensed conveyancers, will want to operate in corporate form. I have made my statement about solicitors. The like will apply mutatis mutandis to the new profession. I myself enormously prefer the idea that corporate form should take the shape of unlimited liability. That is my own prejudice and I will start from that prejudice. It may be that with suitable consumer protection another line will be followed. But I have said what I have said about solicitors and I should think the same will apply to these new conveyancers.

As regards my noble friend, there is no Trojan horse so far as I am concerned. I recognise that there is material for a dispute here—possibly even for harsh words. But they will not, I hope, be directed at me and they will not arise under this Clause 28. If the issue is brought out, it will be brought out into the open and argued fairly on the floor of Parliament.

Lord Simon of Glaisdale

Can my noble and learned friend the Lord Chancellor say what exactly he has in mind by proper consumer protection, after which solicitors may practise as corporate bodies with limited liability? If my noble and learned friend would prefer not to answer that until he tables his new clause, I shall very well understand but I should like the question to be borne in mind.

The Lord Chancellor

I am grateful to my noble and learned friend. His question will be borne in mind. On unlimited liability, I think that I share the view of the Law Society. They have also said that they do not want me to preclude the possibility of limited liability in a statutory form and, at the moment, I am falling in with their request. It is one of these funny things. Perhaps I am talking a long time and boring the Committee, but the other day there was an argument, at which I was not present, about directors, in connection with insolvency. What the public do not really understand, and what I think they have got to understand, is that from the very start limited liability, limited companies, and bankruptcy for that matter, have been of great benefit to the development of trade and industry in this country. From the middle of the nineteenth century, from 1862 onwards, Parliaments have smiled on this development and it would need a very great deal of tergiversation to go back on that. But what they do not realise quite so clearly, and what they ought to bear in mind, is that every legal practitioner knows that they have also been the vehicle for fraud of various kinds. Numberless unsatisfied creditors to this day, from the start to the present, have gone away unsatisfied and sometimes ruined as a result of these basically beneficent devices of the 19th century. It is from time to time the business of Parliament to consider how best one can protect the public against fraud, against dishonest or insolvent debtors, and how one can do so without depriving the entrepreneur or whatever of the advantages of limited liability and the Bankruptcy Acts. It is in the background here—I hope not to introduce it too much into this debate—but it is something which people must keep in their minds when they talk about limited liability.

I do not have any precise proposals for solicitors practising in this form. I rather hope they will not. But the Law Society has said that on the whole it agrees with this view and has also asked that no statutory restriction should be imposed at the moment. We can discuss it again when I table my Government amendment.

9.15 p.m.

Lord Morris

I am very grateful to my noble and learned friend. He referred to the fact that this was really a dispute about tomorrow. Of course, this is one of the problems in this modern day; every single Bill that goes through Parliament is a dispute about tomorrow. I wish to God it was a dispute for the next 25, 30, 50 or 100 years. One of the reasons that have led to the multiplicity of legislation is that Governments can think at the very most only in terms of four or five years. If we took more trouble to get our Acts right, we would need far, far fewer of them. That is a very much broader matter.

However, I am very grateful to my noble and learned friend. He is quite right that the company law of this country going back to 1855 has contributed enormously to the encouragement of trade. The analogies that he drew are not quite fair because this has nothing whatsoever to do with manufacturing or the assembly of widgets. This is the provision of a service to the public in which there is very little risk element other than the provision of investment in a small amount of office equipment and staff. The analogy to companies must be watched very carefully because this is not a risk business.

I am greatly reassured by the fact that it is the determination of Her Majesty's Government that under no circumstances, as I understand it, should limited liability companies be allowed to operate as licensed conveyancers. I am most grateful to my noble and learned friend for elucidating that point. I beg leave to withdraw the opposition of which I gave notice.

Clause 28 agreed to.

Clause 29 agreed to.

Clause 30 [Modification of existing enactments relating to conveyancing etc.]:

Lord Foot moved Amendment No. 43:

Page 25, line 39, at end insert— ("(4) In section 45 of the Solicitors Act 1974 (providing for the appointment of lay observers) any reference to the Society shall be construed as including a reference to the Investigating Committee and any reference to a solicitor shall be construed as including a reference to a licensed conveyancer.").

The noble Lord said: This amendment deals with the matter of the lay observer and it is an amendment for which I hope I would have the support of the noble Lord, Lord Graham of Edmonton. Perhaps I might say to him at this stage that, although we differ, as is quite evident, upon the whole question of the value of establishing a new profession of licensed conveyancers, nevertheless I think the whole Committee will agree that, in having in this Committee the noble Lord as their advocate, licensed conveyancers are peculiarly fortunate because his case could not have been presented with greater moderation and persuasiveness.

The whole object of this amendment is to apply the system of the lay observer to licensed conveyancers as it applies at the present time to solicitors. I should like briefly to remind the Committee of what the lay observer is and what functions he performs. Section 45 of the Solicitors Act 1974 provides that the Lord Chancellor may appoint a lay observer and his function is basically to examine any written allegation by a member of the public concerning the Law Society's treatment of a complaint about a solicitor. When such a complaint is made and when the lay observer has considered the matter, the Law Society is then required to consider any report or recommendation that the lay observer may make and to notify him of any action which they have taken; and furthermore the Law Society is required to furnish the lay observer with any information that he reasonably requires, and finally of course to make an annual report to the Lord Chancellor upon the performance of his duties and functions.

My amendment is simply to provide that the lay observer may perform the same function in respect of licensed conveyancers as is now performed in respect of the Law Society. This is a comparability matter. I hope that the noble and learned Lord will agree that there is no reasonable objection. I hope he will agree also that experience has shown that the lay observer plays a valuable part in protecting the interests of the public. I beg to move.

Lord Denning

I should like to support this amendment. I have had a good deal of experience of matters which have been referred to the lay observer in regard to solicitors. The lay observer has looked into matters most carefully and sympathetically. In addition, in many cases he has managed to get relief or remedies for those who have been aggrieved. The lay observer has done his work admirably and I see no reason why the valuable function which he now plays in regard to solicitors should not equally apply in regard to the new profession of licensed conveyancer.

Lord Graham of Edmonton

I am grateful to the noble Lord, Lord Foot. On the basis of equity and parallel treatment the noble Lord has drawn to my attention a facility which could very well be extended to the new profession or trade of licensed conveyancer. To that extent I am very pleased to support the amendment.

Lord Elystan-Morgan

We on these Benches regard the argument that has been put forward as being not only a strong but also an irrefutable argument for applying the same circumstances with regard to lay observers to licensed conveyancers, as indeed to solicitors. Much has been said today about the need for confirming the status of licensed conveyancers as professionals. It is by the building of bulwarks such as this that some contribution will be made in that direction.

The Lord Chancellor

The noble Lord, Lord Foot, always puts his case so persuasively. I am always very impressed with the extraordinary depth of experience he has. Therefore, it is always difficult to argue the case against him, but I am bound to do so on this occasion. The great danger about political argument is that one either goes on a false premise or on a false analogy. This is a case of false analogy. When the part of lay observer was introduced I do not believe that I was in the Government who introduced it; I have an idea that it was introduced by the party opposite when in government, but I may be wrong. However, I thought originally that the lay observer was a piece of cosmetic mechanism—if indeed cosmetics can be mechanised.

Lord Elwyn-Jones

If I may say so, that is what the noble and learned Lord thought and said.

The Lord Chancellor

Did I say it? Then at any rate I am guilty of consistency for once. But I now recant entirely. I have my experience from the other end of the gun of the lay observer. In particular, I had experience of reading—although I will not go into the detail of it because it is not relevant to this amendment—the Glanville Davies case from beginning to end. I was immensely impressed with the way in which the lay observer had in the great mass of irrelevant detail and invective uncovered what was really the kernel of truth in that case. He may have been helped, but he did it. He has been answerable to my office and I hereby publicly recant what I must have said to the noble and learned Lord, because he happens to have remembered it, and what I recalled that I said at the time.

Lord Elwyn-Jones

If I may be allowed to interrupt again, I believe that I may have done the noble and learned Lord an injustice. I believe that his remarks were in respect of the suggestion for a lay presence on disciplinary committees.

The Lord Chancellor

I am very much suspicious of five wheeled coaches. Originally I thought that the lay observer was a piece of cosmetics and I now publicly recant. I do not think he was. I think he performs a useful function. Most people have thought that as a form of ombudsman in this field he has justified his existence one hundred times over. One is sometimes wrong and this is one of the times when I was wrong first time round. At any rate, whether I said it or not, that is my present position.

However, the amendment would have the effect of extending the Lord Chancellor's powers under Section 45 of the Solicitors Act to the new profession. There are two very substantial elements of protection for the layman in the machinery which is already present in the Bill. One is the lay representation—the very substantial element of lay representation—which will be included in the arrangements for complaints being handled by the investigating committee and the safeguards that could be considered for the benefit of clients. The other of course is the responsibility which I or my successors will have in order to satisfy Parliament that the arrangements made by the council for the protection of the laity are satisfactory.

In this case we are establishing a clearly defined system with lay representation an integral part covering a limited area of service where remedies are clearly defined. I ask the question and give myself a negative answer: in that new field and with those safeguards, is it necessary to increase the duties of the lay observer in the way suggested? The office was introduced in 1974 at a time, it must be remembered, when there was no lay involvement in the complaints processes where solicitors were concerned other than the disciplinary committee. The range of things which could go wrong in a solicitor's relationship with his client is of course very wide and the area where the Law Society could get involved comparatively narrow. Moreover, unlike these arrangements when we are dealing with licensed conveyancers there is quite properly no direct link to Ministers and therefore no line of direct responsibility to Parliament for the satisfactory nature of the procedures.

Much has changed since 1974. Much more will be changed by extensions and improvements introduced in this Bill and the role of the lay observer in relation to solicitors will therefore change with it; particularly through the extension of the jurisdiction of the lay observer to cover the society's powers over shoddy work. In his own area we look to him for a continuing valuable contribution. I ask the Committee to say that it simply is not appropriate to ask an officer who was set up to deal with one particularly wide range of problems to deal with another quite different kind of problem especially where, as I have said, adequate internal safeguards are already provided, as they have been in the case of the licensed conveyancers.

With that explanation, and without any degree of hostility, I recognise the concern of the noble Lord, Lord Foot, but I am not as persuaded as is the noble Lord, Lord Elystan-Morgan, that he has made an overwhelming case. I think he has been perhaps misled by the very attractive false analogy which he presented to the Committee.

Lord Foot

I hope the noble and learned Lord will forgive me for saying at this late hour of the night that I find that answer entirely unconvincing. I still hope that before we finish with this matter the noble and learned Lord will be prepared to consider it again. However, I do not propose to pursue that at this late hour. I only say this. If anything that I have said has caused the noble and learned Lord to recant, all my ambitions in life have been fulfilled. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 30 agreed to.

Clauses 31 to 34 agreed to.

Clause 35 [Interpretation of Part II]:

9.30 p.m.

Lord Graham of Edmonton had given notice of his intention to move Amendment No. 44:

Page 27, line 6, at end insert— (" "consumer" means any person who is a person for whom services are or are sought to be supplied in the course of a business carried on by a licensed conveyancer and who does not receive or seek to receive those services in the course of a business carried on by him;").

The noble Lord said: In view of the fact that we have had an exceedingly good day, and that many references have been made to consumers and consumer affairs, although I wish to develop an argument at some length on the matter, in my view this is not the appropriate moment to do so. Other opportunities will present themselves later in the course of consideration of the Bill. In those circumstances, I shall not move the amendment.

[Amendment No. 44 not moved.]

Clause 35 agreed to.

Clauses 36 to 41 agreed to.

Lord Denham

I do not know how long the next amendment will take.

Lord Simon of Glaisdale

It may take a little time.

Lord Denham

In that case, I think that it probably really is the moment for the House to resume.

Lord Elwyn-Jones

As I understand it from noble Lords, they had it in mind to say in respect of the succeeding amendments, up to and including Amendment No. 47, that they were of such importance that they would like to move them on a different occasion at a different stage of the Bill.

The Lord Chancellor

I think that in those circumstances, and subject to what my noble friend on my right says, we had better resume the House now and adjourn. I am entirely in the hands of the Committee, because I am not fagged out.

Lord Denham

I beg to move that the House do now resume.

Moved, That the House do now resume.—(Lord Denham.)

Lord Elwyn-Jones

I dislike intervening again, but may I confirm in terms that these matters will be opened again at the Report stage?

The Lord Chancellor

I am content either way, but I thought what was being said was that the noble and learned Lord, Lord Denning, and my noble and learned friend Lord Simon of Glaisdale would wish to air these matters at the Committee stage and that we would take the amendments at the next sitting of the Committee. I am in the hands of the Committee. I shall go on if noble Lords want me to go on, but I shall not go on if they do not.

Lord Elwyn-Jones

If it is the better course, in view of what was commonly agreed, I think that we should continue until such time as we conclude matters up to and including Amendment No. 48 on such terms as noble Lords who are moving those amendments think right.

Lord Denham

I think that the noble and learned Lord, Lord Simon, has indicated that the next amendment, so far as he is concerned, is not going to be a very short one.

Lord Simon of Glaisdale

It may not be all that short. I wrote a fairly long letter to my noble and learned friend about it. It raises the issue that was raised in your Lordships' House in the Hanlon decision. I have not yet had an answer to that. It is bound to take at least a quarter of an hour.

The Lord Chancellor

I think that we had really better resume now, if I may say so. The noble and learned Lord, Lord Denning, has the next amendment. I think that these are matters of substantial interest. It may be that we would wish a more representative attendance at the Committee. I think that we would be wise to stop now, although I am perfectly willing to go on if noble Lords prefer it.

The Deputy Chairman of Committees (Lord Aylestone)

It has been moved, That the House do now resume.

On Question, Motion agreed to.

House resumed.

House adjourned at twenty-five minutes before ten o'clock.